Rwandan investors have a new route into one of Africa’s biggest industrial projects after access was opened to the initial public offering (IPO) of Dangote Petroleum Refinery and Petrochemicals in Nigeria. Although the shares are not currently listed on the Rwanda Stock Exchange (RSE), eligible investors in Rwanda can participate in the Nigerian primary-market offer through United Capital Financial Services PLC, Rwanda. Shares are priced at about Rwf589 ($0.40) each, with a minimum subscription of 10 shares. The offer, promoted as an “IPO for the people”, is aimed at widening participation in wealth creation across Africa. The RSE said discussions are also under way on a possible cross-listing or dual listing of the refinery’s shares. “The Dangote Petroleum Refinery IPO is being offered through the primary market in Nigeria, though talks on cross/dual listing are ongoing. However, eligible investors in Rwanda may still be able to participate in the approved IPO through United Capital Financial Services PLC, Rwanda,” a statement from the exchange shows. A future dual listing would allow the shares to trade in both Nigeria and Rwanda, potentially making it easier for local investors to buy and sell them on the domestic market. ALSO READ: Rwandan investors can now buy shares in Dangote refinery Economist John Bosco Kalisa said the refinery could appeal to investors seeking exposure to a large industrial business serving a continent with strong demand for petroleum products. “The advantages are numerous. The returns on investment will be substantial and risks will be minimal as the region is the fastest-growing region across the continent, with strong political and economic stability,” he said. Kalisa argued that demand risk is relatively limited because petroleum products remain essential across African economies. He nevertheless cautioned that investors should not ignore longer-term risks, including competing commercial and political interests that could affect major regional infrastructure projects. “One caveat to be aware of is that diverse interests may undermine the long-term sustainability of the refinery,” he said. The Dangote refinery has capacity to process more than 650,000 barrels of crude oil per day, making it one of the largest refining facilities on the continent. Kalisa said stronger refining capacity in Africa could help countries retain more value from their natural resources and reduce dependence on imported refined petroleum products. ALSO READ: Dangote, other prominent African leaders conclude retreat in Kigali For Rwanda, which imports petroleum products, he said a stronger African refining industry could have wider economic benefits by easing pressure on foreign exchange and improving access to fuel supplies. “It will boost the welfare of Rwandans as petroleum products are key ingredients in various sectors of the economy, including manufacturing, transport and logistics, agriculture as well as the aviation industry,” he said. He noted that several East African countries have oil resources but have historically exported crude oil while importing refined products, meaning much of the value addition takes place elsewhere. “That means the value of the product was created somewhere and the benefits are residing in those countries that have a refinery,” Kalisa said. Ejikeme Okoli, Director of Africa Operations at United Capital Plc, which is facilitating access to the IPO for Rwandan investors, said the offer also reflects a broader effort to connect Rwandan investors to opportunities across African markets. “The good thing is that it’s beginning to connect Rwandans to opportunities across the continent. Investors will be able to partake in mechanisms and instruments that promise decent returns,” he said. Okoli said United Capital is working with local stockbrokers to widen participation in capital markets and connect individuals, companies and institutions to investment opportunities within and outside Rwanda. He said interest in the Dangote offer has been growing among Rwandans at home and abroad. “We have seen growing interest from both Rwandans in Rwanda and Rwandan citizens in other countries,” he said. ALSO READ: Kagame lauds Dangote’s push for African-led development Some prospective investors have already completed subscription forms, while others were seeking guidance on how to participate, he added. “We've seen very, very good interest from not just Rwandan individuals, but also corporates. Some institutions have also reached out, expressing interest in how to participate in this IPO,” Okoli said. According to reports, investors subscribed for 1.476 trillion naira, about $1.10 billion, within hours of the offer opening, representing roughly 69 per cent of the refinery’s fundraising target. Subscriptions remain open until October 13.Individuals can participate from 5,250 naira (Rwf5,800) for 10 shares. Okoli said participation is open to individuals, businesses and institutions that meet the applicable requirements. “It’s across individuals, businesses and people across diverse sectors—anyone looking to invest. It’s also an opportunity to start laying the foundation for wealth creation,” he said. For Rwandans, participation is currently being facilitated through United Capital Financial Services PLC in Rwanda rather than through an RSE listing. The Nigerian refinery could also serve as a reference point for investors watching Dangote’s planned refinery project in Kenya. Okoli said investors interested in the future Kenyan project could use the Nigerian operation to assess the group’s refinery model and performance before making later investment decisions. “For some, it’s an opportunity to invest in the refinery—the one in Nigeria—and maybe give it some time to see if it meets your expectations. That will then become the basis for making decisions when the one in Kenya is built and listed,” he said. ALSO READ: What to know about Dangote’s refinery Rwanda wants to invest in “But this IPO right now is for the refinery in Nigeria.” Rwanda has expressed interest, through the Presidency, in taking about a 10 per cent stake in the planned Kenyan refinery. Okoli said expanding refining capacity in Africa could eventually help improve fuel supply and reduce shortages, while lower dependence on imported refined products could also ease pressure on foreign exchange.
